The role of chromosomal proteins in determining chromosomal structure and regulating cellular functions is being investigated. Research is focused on histones and on the HMG family of chromosomal proteins, the largest group of nonhistone proteins. Studies on the expression of HMG proteins during the differentiation of myoblast, erythrocytes, osteoblasts and promyelocytic cells revealed that the proteins are down regulated during differentiation. Induction of aberrant synthesis of HMG from plasmids expressing the proteins under the control of an inducible promoter interfered with myoblast differentiation suggesting that, in tissue culture, proper cellular differentiation requires regulated expression of HMG-14. Two transgenic mouse lines expressing human HMG-14 have been established. The human protein is present in all tissues examined, suggesting that the regulation of the expression of the exogenous human protein is similar to that of the endogenous mouse protein. Indeed, studies on a genomic fragment containing the region 1000bp 5' from the start of transcription revealed the presence of evolutionarily conserved regulatory elements in this region of the gene. The binding of HMG-14 protein to chromatin has been studied with recombinant proteins containing specific point mutations. The results indicate that in chromatin two molecules of HMG bind to nucleosomes in a cooperative manner. Point mutations in the nucleosomal binding domain of HMG-14 abolished the cooperative mode of binding. The data indicate that the cooperative mode of binding has stringent ionic and structural requirements and depends on multiple weak, but precise contacts. This mode of binding may be susceptible to perturbation by regulatory factors. Recombinant proteins bearing additional point and deletion mutations are used to elucidate the cellular function of the HMG-14/-17 chromosomal proteins.